6 ms·

I wonder who will be left to pay for the deficit when all is said and done?

by tjr225 8y ago

threeseed 8y ago
There is news about this today. McConnell is demanding that the Democrats work with Republicans to cut entitlement programs. Even though they control all three branches and are the ones who passed the very expensive tax cuts.
- munk-a 8y ago
  I mean... no one should be surprised by this at all... unless you've had your head under a rock for quite some time.
- nathantotten 8y ago
  This was by design. Reduce income and leave no choice but cut spending.
  - deleted 8y ago
    [deleted]
  - erichocean 8y ago
    [DELETED]
    - existencebox 8y ago
      Is that true? [0] The real question would be "inflation adjusted per-capita tax receipts over time" but a mid-work googling didn't turn up anything promising; that being said from the above graph _and_ the knowledge that inflation is increasing, your statement doesn't seem to mesh. Feel free to point out if I was really thick and got the wrong data or something. [0]https://fred.stlouisfed.org/series/W006RC1Q027SBEA https://fred.stlouisfed.org/series/W006RC1Q027SBEA
      - deleted 8y ago
        [deleted]
  - dan_quixote 8y ago
    https://en.wikipedia.org/wiki/Starve_the_beast https://en.wikipedia.org/wiki/Starve_the_beast
- 40acres 8y ago
  There has been a clear trend for decades now showing that the defecit grows under Republican presidents and shrinks under Democratic ones. Aside from cultural issues like abortion the Republican agenda seems so far removed from what their constitancy needs it's hard to fathom. The next time Democrats are in control you'll be sure to see GOP complaints that the defecit is a problem and entitlements should be on the chopping block.
  - dragonwriter 8y ago
    > The next time Democrats are in control you'll be sure to see GOP complaints that the defecit is a problem and entitlements should be on the chopping block. They are actually doing that right now, even though they created the massive deficit increase. That's because to them, entitlements are the problem, and the deficit is just the standard excuse.
  - codexon 8y ago
    It does makes sense from their standpoint though. In their mind, everything they want to spend money on is necessary, while everything the other party wants to spend money on is wasteful.
    - wahern 8y ago
      The missing piece of logic is that the Republicans don't actually want to fund their expenditures. Democrats may be the party of tax and spend, but Republicans are the party of just spend. The former provides back pressure to the electorate, the latter is a recipe for ruining the country regardless of your policy preferences.
  - claydavisss 8y ago
    https://www.thebalance.com/us-debt-by-president-by-dollar-and-percent-3306296 https://www.thebalance.com/us-debt-by-president-by-dollar-an... https://www.thebalance.com/deficit-by-president-what-budget-deficits-hide-3306151 https://www.thebalance.com/deficit-by-president-what-budget-... It isn't a "trend".
- Covzire 8y ago
  Isn't it too early to say what the cost of the tax cuts were? If the Republicans are right, they'll spur enough economic growth to be a net gain across the board in both new economic activity (wealth). I don't know if there's a proper name for it, but I'd much prefer a dollar spent in the private sector so the government doesn't have to spend two just to accomplish the same thing.
  - woofyman 8y ago
    > I don't know if there's a proper name for it Voodoo Economics
  - mrep 8y ago
    Don't know why you are getting downvoted since you are right, it is called the Laffer curve [0]. Granted, most evidence shows the maximum tax revenue rate to be closer to 70% so it is highly unlikely that these tax cuts will increase revenue. [0]: https://en.wikipedia.org/wiki/Laffer_curve https://en.wikipedia.org/wiki/Laffer_curve
  - tfehring 8y ago
    >I'd much prefer a dollar spent in the private sector so the government doesn't have to spend two just to accomplish the same thing. This is a false equivalence because the government and the private sector spend money on very different things. If the tax cuts end up being funded by reductions in entitlement spending, for example, the private sector won't funnel money into Social Security and Medicare to offset those reductions. >If the Republicans are right, they'll spur enough economic growth to be a net gain across the board in both new economic activity (wealth) CBO projections imply that the nearly all of the long-term gains from the tax cuts will flow to foreign investors [0], so it certainly won't be a net gain for the US as a whole. [0] https://www.brookings.edu/blog/up-front/2018/05/10/cbo-estimates-imply-that-tcja-will-boost-incomes-for-foreign-investors-but-not-for-americans/ https://www.brookings.edu/blog/up-front/2018/05/10/cbo-estim...
mudil 8y ago
I wonder who will be left to pay for the public pension crisis and the $4 Trillion Shortfall? http://knowledge.wharton.upenn.edu/article/the-time-bomb-inside-public-pension-plans/ http://knowledge.wharton.upenn.edu/article/the-time-bomb-ins...
- wahern 8y ago
  The pensioners and tax payers in the particular states with the problem. It's not a federal issue at all as federal pensions have always been fully funded.
paulpauper 8y ago
Japan has run much bigger deficits relative to GDP for a long time and yet inflation and bond yields are rock-bottom.
- NTDF9 8y ago
  But their GDP hasn't been growing much either. They've been fighting deflation (or non-wage inflation) for a long long time. I'm not sure a deflation is good for us.
  - tanderson92 8y ago
    It doesn't follow that the deflation has been due to the deficit.
    - NTDF9 8y ago
      > It doesn't follow that the deflation has been due to the deficit. It's obvious to the economic world. That's the reason BOJ keeps buying Japanese stocks and bonds (to keep asset prices high when others have stopped buying) and Japanese people have stopped investing in Nikkei (because holding cash == increasing value) That's also the reason Japan (notoriously closed society) is admitting defeat and letting in immigrants to work.
      - tanderson92 8y ago
        It’s convenient for deficit hawks that they can simultaneously blame deficits for deflation in Japan and fear monger about hyperinflation in the US. Your comment also doesn’t link the deficit to the deflation, only speculates on the effects of and policy response to that deflation.
        NTDF9 8y ago
        > It’s convenient for deficit hawks that they can simultaneously blame deficits for deflation in Japan and fear monger about hyperinflation in the US. You need to understand the sequence of events in Japan. They had a massive debt problem (national, local and corporate). That triggered a recession causing asset prices to drop. The caused deflation. The only way to not have asset prices drop and some inflation was printing money. So they printed. Their population and economic investment dropped further while they kept printing money (two opposite pulls). This kept them going until today. It's a wonder they didn't hyperinflate. They pulled it off. But the expense of this is no GDP growth. Infact, whatever GDP growth they have is because of BOJ selling assets to BOJ who sells assets to BOJ. It's a mirage. So, yeah, their real economic activity (thus, investments, wages, innovation) has dropped from zero to negative because for the average individual, holding money = gold!
spork12 8y ago
No one, we can default to the federal reserve if we need to they are our own central bank.

I wonder who will be left to pay for the deficit when all is said and done?

by tjr225 8y ago

I wonder who will be left to pay for the deficit when all is said and done?

There is news about this today. McConnell is demanding that the Democrats work with Republicans to cut entitlement programs. Even though they control all three branches and are the ones who passed the very expensive tax cuts.

munk-a 8y ago
I mean... no one should be surprised by this at all... unless you've had your head under a rock for quite some time.
nathantotten 8y ago
This was by design. Reduce income and leave no choice but cut spending.
- deleted 8y ago
  [deleted]
- erichocean 8y ago
  [DELETED]
  - existencebox 8y ago
    Is that true? [0] The real question would be "inflation adjusted per-capita tax receipts over time" but a mid-work googling didn't turn up anything promising; that being said from the above graph _and_ the knowledge that inflation is increasing, your statement doesn't seem to mesh. Feel free to point out if I was really thick and got the wrong data or something. [0]https://fred.stlouisfed.org/series/W006RC1Q027SBEA https://fred.stlouisfed.org/series/W006RC1Q027SBEA
    - deleted 8y ago
      [deleted]
- dan_quixote 8y ago
  https://en.wikipedia.org/wiki/Starve_the_beast https://en.wikipedia.org/wiki/Starve_the_beast
40acres 8y ago
There has been a clear trend for decades now showing that the defecit grows under Republican presidents and shrinks under Democratic ones. Aside from cultural issues like abortion the Republican agenda seems so far removed from what their constitancy needs it's hard to fathom. The next time Democrats are in control you'll be sure to see GOP complaints that the defecit is a problem and entitlements should be on the chopping block.
- dragonwriter 8y ago
  > The next time Democrats are in control you'll be sure to see GOP complaints that the defecit is a problem and entitlements should be on the chopping block. They are actually doing that right now, even though they created the massive deficit increase. That's because to them, entitlements are the problem, and the deficit is just the standard excuse.
- codexon 8y ago
  It does makes sense from their standpoint though. In their mind, everything they want to spend money on is necessary, while everything the other party wants to spend money on is wasteful.
  - wahern 8y ago
    The missing piece of logic is that the Republicans don't actually want to fund their expenditures. Democrats may be the party of tax and spend, but Republicans are the party of just spend. The former provides back pressure to the electorate, the latter is a recipe for ruining the country regardless of your policy preferences.
- claydavisss 8y ago
  https://www.thebalance.com/us-debt-by-president-by-dollar-and-percent-3306296 https://www.thebalance.com/us-debt-by-president-by-dollar-an... https://www.thebalance.com/deficit-by-president-what-budget-deficits-hide-3306151 https://www.thebalance.com/deficit-by-president-what-budget-... It isn't a "trend".
Covzire 8y ago
Isn't it too early to say what the cost of the tax cuts were? If the Republicans are right, they'll spur enough economic growth to be a net gain across the board in both new economic activity (wealth). I don't know if there's a proper name for it, but I'd much prefer a dollar spent in the private sector so the government doesn't have to spend two just to accomplish the same thing.
- woofyman 8y ago
  > I don't know if there's a proper name for it Voodoo Economics
- mrep 8y ago
  Don't know why you are getting downvoted since you are right, it is called the Laffer curve [0]. Granted, most evidence shows the maximum tax revenue rate to be closer to 70% so it is highly unlikely that these tax cuts will increase revenue. [0]: https://en.wikipedia.org/wiki/Laffer_curve https://en.wikipedia.org/wiki/Laffer_curve
- tfehring 8y ago
  >I'd much prefer a dollar spent in the private sector so the government doesn't have to spend two just to accomplish the same thing. This is a false equivalence because the government and the private sector spend money on very different things. If the tax cuts end up being funded by reductions in entitlement spending, for example, the private sector won't funnel money into Social Security and Medicare to offset those reductions. >If the Republicans are right, they'll spur enough economic growth to be a net gain across the board in both new economic activity (wealth) CBO projections imply that the nearly all of the long-term gains from the tax cuts will flow to foreign investors [0], so it certainly won't be a net gain for the US as a whole. [0] https://www.brookings.edu/blog/up-front/2018/05/10/cbo-estimates-imply-that-tcja-will-boost-incomes-for-foreign-investors-but-not-for-americans/ https://www.brookings.edu/blog/up-front/2018/05/10/cbo-estim...

mudil 8y ago

I wonder who will be left to pay for the public pension crisis and the $4 Trillion Shortfall? http://knowledge.wharton.upenn.edu/article/the-time-bomb-inside-public-pension-plans/ http://knowledge.wharton.upenn.edu/article/the-time-bomb-ins...

wahern 8y ago
The pensioners and tax payers in the particular states with the problem. It's not a federal issue at all as federal pensions have always been fully funded.

paulpauper 8y ago

Japan has run much bigger deficits relative to GDP for a long time and yet inflation and bond yields are rock-bottom.

NTDF9 8y ago
But their GDP hasn't been growing much either. They've been fighting deflation (or non-wage inflation) for a long long time. I'm not sure a deflation is good for us.
- tanderson92 8y ago
  It doesn't follow that the deflation has been due to the deficit.
  - NTDF9 8y ago
    > It doesn't follow that the deflation has been due to the deficit. It's obvious to the economic world. That's the reason BOJ keeps buying Japanese stocks and bonds (to keep asset prices high when others have stopped buying) and Japanese people have stopped investing in Nikkei (because holding cash == increasing value) That's also the reason Japan (notoriously closed society) is admitting defeat and letting in immigrants to work.
    - tanderson92 8y ago
      It’s convenient for deficit hawks that they can simultaneously blame deficits for deflation in Japan and fear monger about hyperinflation in the US. Your comment also doesn’t link the deficit to the deflation, only speculates on the effects of and policy response to that deflation.
      - NTDF9 8y ago
        > It’s convenient for deficit hawks that they can simultaneously blame deficits for deflation in Japan and fear monger about hyperinflation in the US. You need to understand the sequence of events in Japan. They had a massive debt problem (national, local and corporate). That triggered a recession causing asset prices to drop. The caused deflation. The only way to not have asset prices drop and some inflation was printing money. So they printed. Their population and economic investment dropped further while they kept printing money (two opposite pulls). This kept them going until today. It's a wonder they didn't hyperinflate. They pulled it off. But the expense of this is no GDP growth. Infact, whatever GDP growth they have is because of BOJ selling assets to BOJ who sells assets to BOJ. It's a mirage. So, yeah, their real economic activity (thus, investments, wages, innovation) has dropped from zero to negative because for the average individual, holding money = gold!

spork12 8y ago

No one, we can default to the federal reserve if we need to they are our own central bank.